December 21, 2012 12:38:37 PM
WASHINGTON -- President Barack Obama says he'll press ahead with Congress in hopes of preventing across-the-board tax increases set to strike taxpayers Jan. 1 after House GOP leaders unexpectedly put off a vote on legislation calling for higher rates on million-dollar earners Thursday evening.
The measure "did not have sufficient support from our members to pass," House Speaker John Boehner, R-Ohio, conceded in a brief statement.
At the White House, Press Secretary Jay Carney said that Obama's "main priority is to ensure that taxes don't go up on 98 percent of Americans and 97 percent of small businesses," citing statistics associated with Obama's campaign promise to increase top tax rates on households earning more than $250,000 a year.
"The President will work with Congress to get this done and we are hopeful that we will be able to find a bipartisan solution quickly that protects the middle class and our economy," Carney said. Pointedly, the statement didn't say whether Obama would work with Boehner to revive stalled talks or turn first to the Democratic-controlled Senate to try to salvage the situation.
Boehner's attempt to tactically retreat from a longstanding promise to maintain Bush-era tax rates for all was designed to gain at least some leverage against Obama and Senate Democrats in the "fiscal cliff" endgame. Thursday's drama was a major personal defeat for the Speaker, who retains the respect and affection of his tea party-infused conference, but sometimes has great difficulty getting them to follow his leadership.
What Boehner called his "Plan B" was crafted to prevent tax increases set to kick in Jan. 1 on virtually every taxpayer. But it also would have provisions that would have let rates rise for those at the upper income range -- a violation of long-standing Republican orthodoxy that triggered opposition inside the party.
The hope was that successful House action on the measure would force Senate Democrats to respond. But Senate Majority Leader Harry Reid, D-Nev., made it clear that Plan B would have been dead on arrival in the Senate.
"Speaker Boehner's plans are non-starters in the Senate," Reid said.
Boehner announced he would move to Plan B after testing the waters with fellow Republicans regarding a possible pact with Obama on tax increases of $1 trillion -- including the breakthrough proposal on higher tax rates -- and finding them not very receptive.
Thursday's events leave little time for Obama and bruised lawmakers to prevent across-the-board tax increases and deep spending cuts from taking effect with the new year. Economists say the combination threatens a return to recession for an economy that has been recovering slowly from the last one.
The House will not meet again until after Christmas, if then, and the Senate is expected to meet briefly on Friday, then not reconvene until next Thursday.
In his written statement, Boehner said the House has previously passed legislation to prevent all the tax increases from taking effect, and noted that earlier in the evening it had approved a measure to replace across-the-board spending cuts with "responsible" reductions.
In arguing for legislation with a million-dollar threshold for higher tax rates, Boehner said the president has called for legislation to protect 98 percent of the American people from a tax hike. "Well, today we're going to do better than that," he said of the measure that raises total taxes by slightly more than $300 billion over a decade. "Our bill would protect 99.81 percent of the American people from an increase in taxes."
Democrats said that by keeping tax rates unchanged below $1 million -- Obama has offered a compromise $400,000 level -- Republicans had turned the bill into a tax break for the wealthy. They also accused Republicans of crafting their measure to impose a tax increase on 11 million middle class families.
"This is a ploy, not a plan," said Rep. Sander Levin, D-Mich. He accused Republicans of being "deeply cynical," saying the legislation would scale back some education and child tax credits.